'Electro' states will prevail over 'petro' states: ReNew CEO at BS Manthan

At Business Standard's Manthan Summit, ReNew Chairman and CEO Sumant Sinha said countries like India, which are driving electrification, hold a technological edge over nations pushing for fossil fuels

Sumant Sinha, founder, chairman, and chief executive officer of ReNew, said the global energy transition has crossed an inflexion point and is "very hard to derail" despite geopolitical disruptions and global economic turbulence.

 

Speaking on Day 2 of Business Standard’s Manthan Summit, Sinha said the transition was initially driven by climate change, but is now propelled by energy security, affordability, and geopolitics. "Climate change started the journey, while multiple such factors are now pushing it forward," he said. 

Electro vs petro states

He described the emergence of two global camps: "petro states” and “electro states". Petro states are fossil fuel-rich nations, including the United States (US), which has become a major producer of shale gas, mostly extracted through fracking. Electro states, such as India and China, lack fossil fuel reserves and are pushing electrification to reduce their dependence on energy imports.

 

"China has already emerged as an electro state while India is becoming one," Sinha said. Responding to a question on which bloc is stronger, Sinha said he believes that electro states will ultimately prevail in the energy race.

 

"What the electro states have in their favour is technology. The fossil fuel states or the petro states, all they are doing is extracting oil from the ground. It’s going to get harder and harder and more expensive as your reserves get harder to locate and extract," he said.

 

In contrast, he said, technological progress is driving the clean energy agenda forward. "At this point in time, battery prices have come down to a third of what they were literally 18 months ago. Solar prices, we all know, have come down dramatically. In most parts of the world, solar is probably the cheapest form of new energy generation. Wind costs have also come down dramatically," Sinha added.

 

He further said that several end-user industries are shifting away from fossil fuels towards electricity, strengthening the position of electro states. In an earlier BS Manthan panel discussion, industry experts had pointed out that data centres in India are increasingly looking to renewable energy sources for their power-hungry GPU clusters. Sinha also stated that data centres are a huge opportunity for renewable energy sector.

 

"If you ask me, honestly, I think 10 years from now, 15 years from now, it’ll be very clear that the electro states have won," Sinha said. 

India's journey

On India’s trajectory, he said the country is electrifying faster and at a lower per capita income level than most nations historically have, and doing so with clean energy. Citing NITI Aayog’s roadmap to hit Net Zero by 2070, he said electricity accounts for 20 per cent of India's energy basket today, and is projected to rise to 40 per cent by 2050 and 60 per cent by 2070. Of this, renewables are expected to supply 85 per cent of electric power by 2070, he said.

 

He added that in order to meet the target, renewable capacity must increase from the current 140 gigawatt (GW) to 3,000 GW by 2050, and 6,000 GW by 2070. "It’s a massive opportunity and a massive challenge," he said.

 

As for ReNew’s plans, Sinha said the company is expanding beyond its core independent power production business in wind, solar and batteries into manufacturing of solar panels and cells, and plans to integrate backwards into wafers, ingots, and possibly polysilicon.